Choppy waters for SanDisk and Toshiba?

Flash memory production partners SanDisk Corporation of California and Toshiba Corporation of Japan cannot seem to agree on the next flash memory plant location. The partners have jointly invested $5 billion over the past eight years and built two factories.

The second factory recently opened will not even hit its full capacity until 2009-2010. Toshiba manufactures NAND flash memory and SanDisk manufactures flash memory storage cards and their partnership has been key in helping them jointly and individually prosper in the rapidly changing flash memory technology market.

Toshiba is a Japanese company and would like the next plant to be located in Japan. However, Japan has extremely pricey real estate and limited expansion locations and the country is extremely prone to major earthquakes that can delay production, shipping and damage plant inventory, reasons that SanDisk has cited for considering other locations.

Another factor for a location outside Japan is that it is easier to recruit U.S. and European engineers and other talent to regionally based locations, since they don’t need to travel so far away from their home countries for work.

Toshiba has reportedly become a bit anxious over a preliminary agreement that SanDisk entered into with Hynix Semiconductor, even though Hynix is already a chipset supplier for Toshiba. Toshiba is said to be pushing SanDisk for a definitive location decision by early next year.